£100 Million shot in the arm for the domestic central heating market

There was welcome news for the domestic central heating market this week as a new report showed that sales of boilers, radiators, controls and pumps have grown by £100 million, with sales growth for 2017 forecast at £20 million.

The report from MTW Research found that despite more challenging conditions in 2016, schemes such as Internet of Things (IoT), the Renewable Heat Incentive (RHI) and Energy Company Obligation (ECO2) are underpinning demand and growth in the sector.

Research conducted by MTW shows that 250,000 central heating installations were undertaken in the last three years as a result of the ECO scheme.

MTW’s research shows that the ECO scheme has provided a welcome boost for heating manufacturers , distributors and installers. Sales growth for central heating products is forecast at £20 million for 2017.

Based on data from 140 heating suppliers, the research uncovered 18.4 million central heating products sold in 2016.

MTW’s report indicates that while pricing pressure remains a key issue in 2016, investment in added value features such as IoT, ‘Smart Technology’ and enhanced user / installer benefits is giving rise to a ‘two-tier’ market in terms of positioning and growth.

There is optimism for manufacturers and distributors in 2016 as the value of different sectors in the domestic central heating market looks to be growing.

The biomass boiler market is one of these growing sectors, with sales supported by the RHI. That’s despite biomass tariffs reducing by 20%.

The impact of The Internet of Things

In case you are unfamiliar with IoT it is the network of physical objects-devices, vehicles, buildings and other items-embedded with electronics, software, sensors and network connectivity that enables these objects to collect and exchange data.

While the report identifies key products outperforming the space and water heating markets, the most significant contributor in 2016 is the Domestic Internet of Things Market (DIoT), with rapid growth in smart heating controls and DIoT devices.

Heat Pumps and looking ahead

MTW’s research looked at the thriving heat pump market. The report showed that there has been near double digit growth with ground and air source heat pumps gaining share of the overall domestic heating market in 2016.

Sectors such as heat pumps and the circulators market have continued to benefit from ErP (energy related products) legislation with boiler and heat pumps sales boosted by a £6 million bonus pay out from RHI installations.

Although there are still challenges that the industry must face, not least the prospect of leaving the EU, the report indicates that heating sales are going to carry on growing up until at least 2020. The future looks bright.